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Consumers unlikely to benefit from delay in EU deforestation rules

Posted on by darion

EUDR aims to help reduce greenhouse gas emissions and limit biodiversity loss. Source: Mantvis/Shutterstock.

An industry analyst says implementation of the EU’s Deforestation-Free Products Regulation (EUDR) will likely start as planned at the end of this year, despite calls for a delay.

Concerns about the impact of regulation on certain sectors around the world have increased the likelihood of delays in the entry into force of the new rules.

Most importantly, a U.S. Department of Agriculture spokesman said: Only food the country’s government expressed “concerns” about “how the regulations will be implemented and the impact they may have on U.S. manufacturers using sustainable manufacturing practices.”

The right-wing centre European People’s Party has called for a delay in the entry into force of the regulation due to international pressure, while organisations such as the timber and coffee industries have also expressed support for a delay in the entry into force of the regulation.

However, Caroline Midgley, research director for biofuels and oleochemicals at GlobalData, said: Only food: “I think it is very unlikely that the EU will delay enforcement of the EUDR. However, within the framework of the EU regulations, they have a lot of scope to change the way enforcement is done. Through the EU statutes, they can delay sanctions, especially if the non-compliance is due to the fact that their systems are not ready.”

The EUDR came into force on 29 June 2023, repealing the EU Timber Regulation. Operators and traders have been given 18 months from that date – the end of this year – to comply with the new regulation, which aims to help reduce greenhouse gas emissions and curb biodiversity loss by requiring companies trading certain goods in the EU to prove that their product and its value chain are deforestation-free.

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According to a GlobalData report, compliance requirements within supply chains will likely result in higher prices for products for consumers, Only foodparent.

Tests, EU Sustainability Regulation: How the EU Sustainability Regulation and other sustainability legislation will affect consumer marketssuggests that the cost of compliance for companies operating in the supply chains of palm oil products, its derivatives and rubber itself could be as high as $1.5 billion, with “a large part of these compliance premiums” likely to be passed on to EU consumers in the form of price increases.

The industries expected to be hit hardest are food, beverages and personal care, with products like coffee, chocolate, soy-based meat alternatives and shampoo using affected ingredients. The automotive industry is another likely to be hit by tires and other components, the packaging industry by paper and cardboard, and the fashion industry by fabrics and materials.

This is part of a wider set of initiatives being launched by the EU to have a broader impact on sustainable development practices towards climate neutrality by 2050. These also include the European Green Deal, the EU Biodiversity Strategy for 2030, the Farm to Fork Strategy, the Directive on empowering consumers for the green transition and the European Circular Economy Action Plan.

Fred Diamond, senior food and drink consultant and analyst at GlobalData, said of the EU’s efforts: “The EUDR objectives are clear and reducing greenhouse gas emissions and protecting biodiversity are essential. However, there could be some disruption in the future.

“The additional EUDR requirements could lead to some suppliers of goods in what the EU designates as ‘third countries’ moving away from the EU and increasing trade with countries that impose fewer regulatory requirements, such as China. Some food categories, such as plant-based meat, may need to reformulate and switch to alternative protein sources, such as pea protein, if the EUDR results in higher prices for soy for food production.”